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BLP > 9.2 Corporate Insolvency > Flashcards

9.2 Corporate Insolvency Flashcards

1
Q

Which is wider - associates under 435 IA or CP under 252 CA

A

435 IA

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2
Q

Who cannot bring claim for misfeasance against D

A

A

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3
Q

Where are ‘CPs’ defined for voidable transactions in IA

A

249

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4
Q

When do clawback and personal liability of Ds not apply

A

If only in receivership - must be L/A

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5
Q

What is the max time D can be disqualified under CDDA

A

15 years

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6
Q

WT under IA - where

A

214 + 246ZB

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7
Q

Who can bring a transaction defrauding creditor

A

Victim, e.g. creditor

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8
Q

Two other considerations if FT claim applies (for personal liability)

A

s.10 CDDA and it is a crime under 993 CA

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9
Q

When is the ‘onset of insolvency’

A

Issue of winding up petition

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10
Q

What test is used for ‘every step’ defence and knowledge under 214 WT

A

The higher of objective and subjective test

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11
Q

Four voidable transactions by company

A

Undervalue, preference, avoidance of certain floating charges and transactions defrauding creditors

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12
Q

Does the court consider the effect of ordering repayment under 239 preferences on beneficiary

A

No

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13
Q

How does the ‘relevant time’ for voidable transactions work

A

backwards from I onset

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14
Q

When will FT apply

A

If knew insolvency, but still incurred credit

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15
Q

Where are the clawback provisions in IA

A

238 - 241

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16
Q

What is the GF and reasonable grounds defence for 238 undervalue - what kind of test

A

Objective

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17
Q

What is a transaction at undervalue

A

Gift/significantly lower than MV

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18
Q

What is s.6 CDDA

A

Unfit

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19
Q

What about L’s expenses in clawback claim

A

Recovers even if loses claim

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20
Q

What single insolvency test is used for personal liability of Ds

A

BS

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21
Q

When will 423 always be considered

A

If 238 applies (undervalue)

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22
Q

Who alone can make D personally liable for misfeasance

A

Only L

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23
Q

What action for D’s personal liability requires actual dishonesty

A

FT

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24
Q

Three-stage test for preference by company

A

Given to C/S, in better position, and desire to prefer

25
Q

What is s.4 CDDA

A

Fraud in winding up

26
Q

What may D be liable for if clawback against other beneficiary

A

Misfeasance (212) and/or s.6 CDDA

27
Q

Why is 423 harder than 238

A

Intent to prejudice required

28
Q

Why is it easier to bring 423 claim successfully if short time since transaction

A

To prove ‘intent to prejudice’

29
Q

What is s.10 CDDA

A

F/WT

30
Q

What voidable transaction has a three-stage test

A

Preference

31
Q

When will a floating charge voided under 245 stay valid

A

To extent any new money given in consideration

32
Q

Can D avoid WT liability by resigning

A

Only if done everything they can to convince other Ds

33
Q

What is not a ‘desire to prefer’ for 239

A

Commercial pressure

34
Q

What do clawback provisions help to do

A

Restore funds that should have been available to creditors

35
Q

When does the burden shift in 245 avoidance of certain floating charges

A

For ‘insolvency’ if to CP

36
Q

How many potential claims personally against D

A

Four

37
Q

FT under IA - where

A

213 + 246ZA

38
Q

What may additionally happen if 245 applies (avoidance of certain floating charges)

A

Transaction may also be void under UV/preference

39
Q

Who does FT claim apply against

A

Any person

40
Q

When does the burden shift in transaction at undervalue

A

In ‘insolvency’ if CP

41
Q

What will bank be concerned about when using representatives to guide company to avoid insolvency

A

That reps = shadow Ds, and thus liable

42
Q

What case applies to 245 avoid floating charge

A

Clayton’s Case

43
Q

How might charge avoided under 245 eventually cover all money

A

If some money given at beginning, and then pay back, and then draw down again

44
Q

How many clawback provisions

A

4

45
Q

When does the burden shift in 239 preference by company

A

Not for insolvency, but yes for ‘desire’ if to CP

46
Q

Why is 423 perhaps more beneficial than 238

A

No relevant time

47
Q

What are two of the four tests of insolvency

A

CF and BS

48
Q

Where is misfeasance in IA

A

212

49
Q

What two other considerations if WT claim applies (for personal liability)

A

S.6 and s.10 CDDA may apply

50
Q

What personal liability of D is also a crime

A

FT under 993 CA

51
Q

Where are four tests of ‘insolvency’

A

123 IA

52
Q

Who can bring F/WT claim

A

L and A

53
Q

What voidable transaction is automatic

A

Avoidance of floating charge under 245

54
Q

What is it unclear about the application of 238 IA

A

If applies when granting security w/o consideration

55
Q

Does avoidance of transactions unwind those transactions?

A

No

56
Q

Why does 1157 not apply to let court give relief to D from BoD

A

Bc D has acted unreasonably

57
Q

What should L/A check before avoiding floating charge

A

If properly registered under 859A - if not, 859H

58
Q

What do you always mention when advising company on entering into transaction that may be avoided in insolvency

A

Although claim not made against the company but against third party, the Ds can be liable for misfeasance and/or disqualified as being unfit under s.6 CDDA

BLP (18 decks)

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